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99 Cents only Stores: It Infrastucrure on a Budget

Essay by   •  May 12, 2012  •  Essay  •  346 Words (2 Pages)  •  1,465 Views

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99 cents only stores: IT infrastructure on a budjet

The value chain, also known as value chain analysis, is a concept from business management that was first described and popularized by Michael Porter.

The value chain for 99 Cents Only Stores is good. The company’s decision in purchasing High Jump Supply Chain Advantage for its new distribution center will help them to solve the issues they have with new center.

Porter’s Competitive Forces Model

Threat of new entrants: 99 Cents Only Store are 5 times larger than others and their sales are 5 times more than competitors. Considering the investment required entering the market threat of new entrants is low.

Industry Competitors: The competition is strong for 99 cents because some of the competitors have better purchasing power then them.

Substitute: They are selling generic brands so the substituting products are easy.

Suppliers: Suppliers are strong because they are needed to purchase items on lower prices.

Buyers: Bargaining powers of buyers is high.

99 Cents Only Stores intend to increase its presence by opening new stores and extending its reach to even high income areas. Information technology has played a crucial role in growth of the company and investment in purchasing new software to meet their changing needs also shows company’s recognition of its importance.

The company is very conscious when it comes to IT infrastructure investments and wants to make sure that they could save money if possible and keep budget as low as possible. This policy sometimes wastes time but they have chosen new software which will ease their procedures and they don’t have to change any of their processes to conform to new software.

With the new software company will be able to meet its requirements of RFID and voice based inventory system which will enable them to work more efficiently and reduce the time lag in displaying products in the stores.

Some of the issues which are difficult to handle are the implementation of new software successfully and training of employees because distribution center is working in 3 shifts and its difficult to give training to them separately.

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